MPs support council tax reform over mansion tax

A majority of MPs believe introducing higher rate council tax bands is a better way to tax property than a mansion tax.

A poll by the British Property Federation (BPF) has show 69% of MPs said extra council tax bands are a better way to reform property taxes on high-value homes.

Two fifths of Labour MPs, the party that is championing the mansion tax on homes worth £2 million or more, said using council tax made more sense.

The majority of Liberal Democrat MPs (89%) and Conservative MPs (92%) think council tax reform would be more appropriate.

Three quarters of politicians surveyed believes a revaluation of all homes to update council tax is needed. The tax is still calculated on house price in 1991 and since then house price inflation has varied significantly across the country from 160% to 400%.

The BPF has urged policymakers to consider council tax revaluation, which is believes is fairer and more efficient than a mansion tax, which would unfairly hit London and the South East hardest and could act as a deterrent to investment.

The organisation said a revaluation would be easy to implement and would take heed of the Lyons Inquiry of 2007 that urged future governments to revalue council tax and add new bands to update the tax base and improve fairness for taxpayers.

Ian Fletcher, director of policy at the BPF, said: ‘This poll shows that a full council tax revaluation rightly commands widespread political support, particularly across the Labour party, and that the majority of MPS recognise that basing council tax on 1991 house prices is simply unsustainable.

‘The mansion tax is a political gimmick that is more about the narrative of rich versus the rest than anything else. Reforming council tax through a revaluation and raising revenue through adding more council tax bands would restore fairness to the council tax system and be better for the country as a whole.’

He added that the poll showed support for the mansion tax was weak, even among the MPs of parties that were promoting it.